Iowa Exploring Increase to Vehicle Purchase Fee

Iowa Exploring Increase to Vehicle Purchase Fee

A special commission is studying whether Iowa should raise the fee on vehicle purchases by 1 percent. From my friends at Radio Iowa:

Stuart Anderson, with the Iowa Department of Transportation, says the state could collect as much as $50 million more by raising the new or used car fee by one-percent. “That fee right now is at five-percent and one of the items being discussed is to increase that fee to six-percent so it would match the sales tax paid at the state level,” Anderson said.

In the past, the use tax on a vehicle purchase was tied to the state sales tax, but that isn’t true any more. Anderson says the bigger fee would be easy to collect, but he admits it could discourage vehicle sales.

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